Billions pour out of Standard Life Aberdeen in dismal year
THE world’s top money managers, including Standard Life Aberdeen and Blackrock, have seen billions pour out of their ailing funds in their worst year since the financial crisis as they struggle to battle widespread strife in the asset-management industry.
City fund giant Standard Life Aberdeen’s market value has halved during a rocky first year following an ambitious £11bn merger.
Fees in asset management are under pressure from the rise of passive investment and zero-fee funds, while outflows have accelerated in 2018 as market turmoil prompts investors to yank money out of equity funds.
An index tracking shares in Wall Street’s mammoth asset managers has slumped to its lowest level in two years, suffering its worst yearly slide since 2008. Blackrock, the world’s largest money manager, has shed a quarter of its value in 2018, $14bn (£11bn), while Invesco’s shares have plunged 53pc. Standard Life Aberdeen finished 2018 the second-worst-performing stock on the FTSE 100 and revealed in August that £16.6bn had left the company in the first half of the year. A volatile final quarter for markets could ramp up the pressure on co-chief executives Keith Skeoch and Martin Gilbert. RBC Capital Markets analyst Gordon Aitken said Standard Life Aberdeen’s dividend is now less secure, put under pressure by the global slump on stock markets.
After selling its insurance business to Phoenix earlier this year, “the cash generation of the business is now leveraged to prevailing market conditions”, he added.